There may be trouble ahead for the bank, but outgoing EBRD president Jean Lemierre defends the record
A regional GDP growth figure of high single digits in recent years has given the EBRD a strong following wind, a fact reflected in the strong results filed by the bank in recent years.
If confirmed, incoming president Thomas Mirow will likely find the going tougher.
That’s partly down to the economic slowdown emanating from the US. It’s also due to a hangover from personal, corporate and, in some cases, public-sector debt splurges.
But many argue that as the EBRD moves east it is moving into wilder terrain, where the surprises are as likely to be on the downside as the up.
That shift eastwards has been dramatic. “When I joined the bank its centre of gravity was somewhere between Warsaw and Budapest; now it is somewhere between Cherevopets and Kazan,” says Jean Lemierre, the EBRD president stepping down in June after eight years at the helm of the bank.
Lemierre agrees that there are some clouds looming in the region. “We see stresses in countries such as Kazakhstan and Russia,” he says, while arguing that they can be contained.
The dramatic transition of the countries of central and eastern Europe has, of course, gone hand-in-hand with their long courtship and eventual betrothal with the EU. That political dynamic is more fractured as EU expansion shudders to a halt and Russia looms ever larger in the field of operations.
Lemierre denies that the absence of the EU carrot will necessarily weaken the drive towards market economies. “The political agenda may be different but the story will be the same,” he says. He points to the emergence of a middle class in countries such as Ukraine and Russia, arguing that they too want the things the EBRD can help provide: mortgages and car loans, for example.
Lemierre also adds that his bank is not alone in its move eastward: Polish companies invest in Ukraine and so have a vested interest in encouraging western standards of corporate governance and rule of law.
Even in a month which sees nuclear missile launchers parading through Red Square for the first time since the fall of the Soviet Union, Lemierre cautions against seeing Russia in black and white. He points to the EBRD’s deepening engagement with projects such as IPOs (initial public offerings) for Russian rail freight operators. “These are good challenges for a new president,” he says.
Asked if he has any regrets about his eight-year tenure at the bank, Lemierre says he didn’t arrive with a fully-fledged plan of action against which to measure his subsequent record. Still, he wished it had proved possible to engage with Belarus and Turkmenistan. “I hope it will come,” he says. —M.J.